Investment policy
of the Republic of Kazakhstan
6.1 bln. USD 20.1 bln. USD
Kazakhstan attracted 222.4 billion USDof foreign direct investments
(2005-2015) 2005-2010 2010 – 2015
24%
76.8%
0
20
40
60
80
100
120
FDI in manufacturing industry Total FDI
The main countries-investors(2005–2015, bln. USD)
Netherlands 64.0
USA 23.8
Switzerland 15.0
China 13.1
France 12.2
UK 11.5
FDI statistics
FDI in manufacturing industry
Before the industrialization During the industrialization
0.3 0.7 1.1 2.1 1.8 2.2
5.73.5 2.5 3.7 2.6
7.9
12.1
19.421.3 21.4 22.2
26.528.9
24 23.9
14.8
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Manufacturing industry Total
8 3557 288
2 7703 6653 504
2 771
1 4762 565
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
Mining industry Oil and gas Trade Manufacturing industry
FDI by major activities (million USD)
2014 2015
62%
47%
30%58%
2
DOING BUSINESS 2015
Source: The World Bank, Doing Business 2015
132
130
118
116
109
84
83
67
51
41
15
7
5
1
Таджикистан
Индия
Иран
Бразилия
Индонезия
Китай
Украина
Кыргызстан
Россия
Казахстан
Германия
США
Гонконг
Сингапур
GLOBAL COMPETITIVENESS INDEX
Rank Country Score
1 Switzerland 5.76
2 Singapore 5.68
3 USA 5.61
4 Finland 5.53
5 Germany 5.53
6 Netherlands 5.50
… … …
42 Kazakhstan 4.49
45 Russia 4.44
55 India 4.31
79 Ukraine 4.03
102 Kyrgyzstan 3.83
Source: World Economic Forum, Global Competitiveness Report 2014-2015
Positions in the international rankings
Singapore
Hong Kong
USA
Germany
Kazakhstan
Russia
Kyrgyzstan
Ukraine
China
Indonesia
Brasil
Iran
India
Tajikistan
3
Public agencies, national companies and mayor’s offices’ hearing
395 projects927 investors
670 000 visits from 170 countries
Information on 12 languages
1
2
3
Public agencies, national holdings
and the NCE
Mayor’s offices
Investors’ service center (ISC)
Data base baseinvest.kz
Investment website
www.invest.gov.kz
Support of investors
16ISC
10SEZ
25IZ
New approaches for investment attraction
New incentives
1.Tax benefits
2. Investment subsidies
3. Immigration benefits
4. Stability of legislation
5. Recruitment simplification
Business forums
Road show
Diplomatic representative
offices of Kazakhstan
EXTERNAL LEVEL
CENTRAL LEVEL
REGIONAL LEVEL
Provision of investors with access to land and infrastructure (SEZ, IZ)
Investment advisers at the embassies of the Republic of Kazakhstan in 10 countries
Distribution of investors to the public agencies, national companies and the private sector
4
1
2
1. New directions:- Infrastructure (transport, housing, social, energy) and PPP, mining- M&A- Portfolio investors- Funds
representative offices abroad2
1
2
The detailed plan for improvement ofthe investment climate in accordance with the OECD standards
2. SPIID 2 industries (Greenfield): metallurgy, chemical and petrochemical industry, mechanical engineering, production of construction materials, food industry
Sectoral and regional annual Plans of activities to attract FDI with goals/indicators in coordination with the Ministry for Investments and Development
Control of the implementation
Problem solving (Ombudsman)
5
3
The regional councils under the leadership of governors together with the NCE
1
Review of problem cases
Government Council
One Stop Shop for investors
SPAIID
Investment attraction system
4
Entrance group
• Improvement of the migration control procedures• Improvement of the foreign labor attraction procedures• Extension of visa-free regime
New approaches
• Appointment of special advisers in the foreign offices of Kazakhstan and creation of KAZNEX INVEST front-offices
• Strategic investors and TNCs ’ issues consideration within the Investment Council
• Improvement of the investment preferences package • Sectoral and regional Plans for attracting investments
Fiscal system
• Improvement of the law enforcement practice of tax and customs legislation
• Improvement of transfer pricing• Decriminalization of tax offenses
Other systemic issues
• Strengthening the work of the “One Stop Shop”• Simplification of access to land• Improvement of legislation in the sphere of PPP
THE MAIN APPROACHES
of the detailed plan for improvement of the investment climate in accordance with the OECD standards for 2016-2017
Investment policy
The GOAL is to join the OECD Investment Committee in 2017
Further improvement of the investment climate
through implementation of the standards
The first Kazakhstan’s Investment policy review has been conducted
The second Investment policy review of Kazakhstan has been launched
5
State support measures for investors
Basic package:283 types of activities*
Special package:95 types of activities*
Investment Incentives in SEZs
EXEMPTION FROM CUSTOMS DUTIES UP TO 5 YEARS AND VAT ON IMPORTED:
• major equipment and spare parts to it;• accessories, raw materials and (or) materials. +
(VAT on import will enter into force on 1 January 2017)
+(VAT on import will enter into force on 1 January 2017)
+(VAT on import does not apply to the SEZ incentives)
THE STATE GRANTS IN KINDFree land, buildings, structures, machinery and equipment, computers, measuring and control devices and equipment, vehicles (excluding cars), industrial and household equipment.
• Not more than 30% of the volume of investment in fixed assets + + -
TAX PREFERENCES
Rate of 0%:
- Corporate Income Tax- Property Tax- Land Tax
- + +EXEMPTION FROM VAT
Marginal rate of tax depreciation up to 0% • 30% social tax for 5 years in the SEZ "PIT“ - - +INVESTMENT SUBSIDY
Reimbursement of up to 30% of actual costs of construction and installation works and
purchase of equipment - + -STABLE LEGISLATION1. Stability of tax legislation;2. Stability of the legislation on employment of the population in the field of attracting
foreign labor.- + -
FOREIGN LABOR
Without permit - + -OTHER INCENTIVESFree plot of land for the entire period of existence of a SEZ; Simplified procedure for employment of foreign labor. - - +* Matching the List of Priority Activities, approved by the Governmental Decree No. 13 dated January 13, 2016.* A newly established legal entity (the state registration of such legal entity has been completed not earlier than 24 months before filing an application for the investment preferences) with investments not less thantwo-million-fold rate of MCI. 6
Functions:1. Reception and advising on existing public services;2. Assistance in the preparation and presentation of the documents required for obtaining the public services;3. Support of investors in central and local executive bodies in obtaining the public services, in accordance
with the rules on the organization of activity of “One Stop Shop", approved by Governmental Decree No. 1133 dated December 30, 2015;
4. Monitoring of the process of providing investors with the public services.
Contacts:Call-center: +7 (7172) 75-45-40
INVESTOR
Investors Service Center
19 investor service sectors in
The State Corporation "Government for Citizens“, JSC
«One Stop Shop» for Investors
1. Conduct consultation on the issues ofobtaining public services forimplementation of investment projects;2. Check the documents for compliancewith the standards of the public services;
3. Send for consideration to theappropriate public agencies.
The TIME is set by the standards for provision of services + time to deliver by
the courier to the service provider
The possibility of monitoring the provision of public services
www.isc.baseinvest.kz
The result for provision of public services
more than
250investors
Received public services:Sought the advice
more then
80investors
Investor visa
Permits
Provision of land in urban areas for construction
Conclusion of the investment contract
Registration of entities
“One Stop Shop“ specialists for investors:
JANUARY-MARCH 2016 RESULTS
7
Construction of infrastructure objects
Cooperation with International experts
Systemic Measures
Implementation of the unified management model (UMM)
Plan
- In 2017-2018 the infrastructure of all SEZ’s is
expected to be fully finished (including SEZ “NIPT” and SEZ “Pavlodar”)
- On 27th of October 2015 the law “on amendments and additions to some legislative acts of the Republic of Kazakhstan on the improvement of special economic zones” has been passed
- Implementation of the UMM in 4 SEZ’s («Ontustik», «Saryarka», «Pavlodar», «Seaport Aktau»)
Creation of the Unified Coordination Center of SEZ’s
UCC - Unified operator that supports functioning of SEZ’s
- 148 operating projects, out of them 22 with foreign share
- 102 project are under construction
- In 2015-2016 the basic
infrastructure of 8 SEZ’s is expected to be finished
- SEZ “Astana – new city” - SEZ “Seaport Aktau”
Commissioning of the projects: 2016 – 25 (107 bln. KZT)2017 – 7 (64 bln. KZT)2018 – 9 (700 bln. KZT)2019 – 4 (1 279 bln. KZT)
New workplaces- 17 000
Members of SEZ’s
- In 2015 22 project were put into operation, total worth of the project
is 112 bln. KZT.
The development of Special Economic Zones
8
Ombudsman functions:
1. Consideration of investors applications and development of recommendations for their resolution, including the cooperation with public authorities;
2. Assistance to investors in emerging issues in court and pre-trial procedures;
3. Development and submission of recommendations on improvement of legislation of the Republic of Kazakhstan.
Investment Ombudsman
Ministries
The General prosecutor's office of RK
Ministry of Foreign Affairs
Ministry of Justice
Ministry of Energy
At the head of the interdepartmental
working group which includes:
Investment Ombudsman –
Minister of Investment and Development of RK
Ministry of Defence
Ministry of National Economy
Ministry of Finance
Ministry of Culture and Sport
Ministry of Healthcare and Social Development
Ministry of Education and Science
Ministry of Agriculture
Results of 2015
Applications accepted:
11 private issues 51 systemic issues62
Resolved in favor of investors
40
Recommendations on improvement of legislation have been developed
8
Examples
- Providing plant under construction with the infrastructure
- Tax issues
- Issues of the inclusion in the Register of domestic producers
- Trademark registration- Products transportation issues
9
National Investment Internet Resourcewww.invest.gov.kz
Database of investment projects and foreign investorswww.baseinvest.kz
Useful Links
10